Quetion about inflation

Discussion in 'Economics' started by commoditiestrdr, Jan 24, 2008.

  1. commoditiestrdr

    commoditiestrdr Commodities View

    Hey I'm not an expert on economics...but see if you guys agree with me.

    In 2001 Greenspan butchered rates down to 1%....I feel this in turn created the inflation that have now (oil at 90..gold at 800 etc.)

    He butchered rates to save us from a possible depression. In turn he just took the bubble we had and put it into real estate and at the same time created inflation with a 1% discount rate.

    The fed is now caught in the middle lower rates to save the economy and real estate or raise rates to cut inflation.

    They seem to just ignore inflation....what happens when they ignore it too long. A rate decrease just seems insane. Eventually they will have to raise rates. When they do how bad will real estate get and the economy.

    What happens if we see the late 70's early 80's all over again with mortgage rates at 20%.

    I just don't see how they can lower rates with commodities like gold and oil raising the way they are??